Tag Archives: CBO

Post navigation

“There are three kinds of lies: lies, damned lies, and statistics,” is a phrase often attributed to either Mark Twain or Benjamin Disraeli, and it is often misquoted like I have done today. It is the third kind of lie, that of government budget estimates that I want to address today. Here’s the news that greeted me this morning.

Health care legislation drafted by a key Senate committee would expand coverage to 94 percent of all eligible Americans at a 10-year cost of $829 billion, congressional budget experts said Wednesday, a preliminary estimate likely to power the measure past a major hurdle within days.

The Congressional Budget Office added that the measure would reduce federal deficits by $81 billion over a decade and probably lead to “continued reductions in federal budget deficits” in the years beyond.

The report paves the way for the Senate Finance Committee to vote as early as Friday on the legislation, which is largely in line with President Barack Obama’s call for the most sweeping overhaul of the nation’s health care system in a half-century.

I find it interesting that the last paragraph talks about this bill as the “most sweeping overhaul” in a “half-century.” That last overhaul was Medicare, and as Jeff Emanuel points out, it’s not a good example of wise government spending.

At its inception in 1966, Medicare carried an annual price tag of $3 billion. Its Congressional founders predicted that cost would rise to $12 billion a year by 1990 — a figure that accounted for inflation.

The true cost of Medicare is stunning. In 1990, rather than costing American taxpayers $12 billion, Medicare cost $107 billion — an increase of 800% over the government’s best guess at the program’s cost 23 years before. That cost has increased exponentially as the years have passed since 1990. This year, $484 billion will be spent on mandatory Medicare outlays; by 2018, that number will be $885.1 billion, according to the non-partisan Congressional Budget Office. The total amount owed Medicare beneficiaries (American workers who are at least 22 years old and who have paid into the system, meaning they are due Medicare coverage upon retirement) is a staggering $32.3 trillion — an amount over twice America’s GDP, and nearly five times the publicized national debt.

The fact that the federal government has allowed a key health coverage program with which it has been entrusted to fall over thirty trillion dollars in debt should send a powerful message about Washington’s ability (or, more correctly, inability) to be a good steward of Americans’ health care dollars and coverage.

I’m not impressed over the CBO’s numbers because I recognized them for the guess that they are, and I don’t see them as a green light for passing the unfinished health care overhaul. I’m all too aware that the government estimates of one year are the horrible over spending of years later. Since the government can’t properly handle Medicare in a manner fiscally responsible, I have no desire to give them access to a large chunk of America’s economy to muck up.

You’ll hear the CBO estimate many times in the next few days and weeks. If anyone tries to use them as a reason for passing President Obama’s dream of health care reform, simply ask them to name a government program that has ever come in on budget. Past government performance proves that there are lies, damn lies, and government budget estimates.